Iain Duncan Smith has been criticised for claiming an independent Scotland would have to raise taxes or cut public services to afford current levels of welfare spending.

Nicola Sturgeon, deputy first minister now in charge of the Scottish government's independence policies, accused the work and pensions secretary of "blatant scaremongering" and using misleading figures.

Duncan Smith told a conference on welfare reform in Glasgow on Wednesday that welfare spending in Scotland was 6% higher per capita compared with the rest of the UK: a cost only affordable because the burden was shared across the UK.

He said Scotland's population was also ageing faster, putting greater pressure on pension costs and services for elderly people, including Scotland's free personal care policy. More than 25% of population will be over 65 by 2033, while the UK as a whole would not reach that level until 2050, he said.

Speaking before the Centre for Economic and Social Inclusion event, Duncan Smith had said: "If the unthinkable [independence] were to happen, a Scottish government would face a very stark choice of raising taxes or cutting services. This is not scaremongering, its reality."

He told delegates: "Together, the UK – with a broader and more sustainable tax base – is in a stronger position to tackle these challenges and to maintain public services in the process.

"And just as our welfare union is of considerable benefit to Scotland, by pooling both the resources and risks, we all share in the benefits of a unified UK."

Sturgeon did not directly dispute his figures but said at £21bn, overall spending on social protection in Scotland, including welfare spending, social exclusion, sickness benefits and pensions, amounted to 40% of Scottish tax revenues last year compared with 42% of tax revenues on similar spending for the UK as a whole.

"This is the height of hypocrisy from a Tory government which is set on dismantling welfare provision as we know it – and only independence will protect Scots from the savage benefits cuts the Conservatives are now engaged in," she said.

"The reality, as opposed to this blatant Tory scaremongering, is that Scotland more than pays its way when it comes to welfare, and an independent Scotland will be well able to afford to protect the most vulnerable members of our society."

Scottish National party MP Eilidh Whiteford, its work and pensions spokeswoman at Westminster, said that during the previous year, the ratio stood at 42% of total Scottish tax revenues compared with 43% for the UK overall according to the Scottish government's figures.

Holyrood figures for the past five years, she said, showed that Scotland had contributed £8.6bn more in tax revenues than was spent in Scotland, equivalent to £1,600 for every person, partly due to North Sea oil and gas revenues.

"Just like Mr Duncan Smith refuses to accept the facts about his damaging tax credit changes, the facts show that he completely wrong on Scotland's welfare spend in comparison to the UK," Whiteford said.

The figures, drawn from the Scottish government's annual financial survey Government Expenditure and Revenues Scotland, are contested by the UK government. The latter insists that some of its data is extrapolated and is not based on the same accounting measures used by the Treasury.

This dispute, which is also touches on tenuous proposals for Scotland to get much greater control over welfare policy while remaining in the UK, raises questions about how an independent Scotland would divide its spending and which areas of welfare it would prioritise.

The Scottish government has not yet offered any details on how the welfare system would be restructured or funded, assuming it won the independence referendum in 2014, or whether it would propose sharing some major costs such as national insurance and pensions with the rest of the UK post independence.

Following the disclosure that the UK government may cut the link between benefits and inflation, anti-poverty and disability rights campaigners in Scotland attacked Duncan Smith's overall welfare reforms, urging him to rethink his "disastrous" changes.

John Dickie, Scottish head of the Child Poverty Action Group, said the reforms overall would put another 50,000 children into poverty by 2020.

"The poorest families and children are already bearing the brunt of the UK government's austerity agenda. As one of the richest countries in the world it is beyond belief that the richest get a top rate tax cut while the poorest are being forced into deepening destitution," he said.

Bill Scott, from Inclusion Scotland, a consortium of organisations of disabled people and disabled individuals, said: "To add insult to injury those disabled people who manage to hold onto their benefits are being told that they will have to meet the constantly increasing cost of living with no help from the government.

"IDS [Iain Duncan Smith] can freeze benefits but can the government also freeze food, fuel and transport prices? If not can he explain how people already living on a poverty level income can meet these extra costs?"

The prime minister, David Cameron, and the Scottish first minister, Alex Salmond, sign a deal, dubbed the Edinburgh agreement, giving the Scottish government the power to hold a referendum on independence from the UK